The home-buying process is stressful. Finding the perfect property, moving from your current residence and securing a loan can be tough to juggle.
Once you’ve decided to jump into the market, give yourself a leg up — and minimize the last-minute scramble — by taking some time to gather the documents you’ll need for your home loan ahead of time. But what documents are needed to buy a house? The exact paperwork needed to buy a house will vary depending on several factors, including your lender, loan amount and income. As a starting place, we’ve compiled this list of 12 documents needed to buy a house.
1. Pay Stubs
Lenders need to know you have stable income that will allow you to pay your mortgage each month. Bank on showing at least 30 days of income via pay stubs. If you don’t have paper copies, contact your workplace HR representative for digital stubs. Use our calculator to see how much mortgage you can afford.
2. Proof of Employment
Your lender will likely use your pay stubs as proof of employment. But, in some cases, your lender may request a letter from your current employer to confirm your hire date and employment status.
3. Employer Contact Information
Again, steady income is the name of the game when it comes to securing a loan. Compile a contact list documenting your last two years of employment. Include all company names and addresses, along with names and contact information for your former bosses or HR representatives.
4. Tax Documents
Be prepared to include at least two years of tax returns and W2s with your paperwork for buying a house, which will further support your income history. (If you haven’t already, be sure to sign your tax documents.) A long-term history shows your ability to pay your mortgage over the life of the loan — often 30 years. If your income has changed drastically year over year, your lender may require further explanation or documentation.
5. Bank Statements
Lenders want a snapshot of the money coming and going from your bank account. In most cases, 30 to 60 days of transactions will suffice.
6. Business Documents
If you’re self-employed, work as a contractor or otherwise operate a business, your lender will want to see tax returns (again, signed), along with year-to-date profit and loss statements.
7. Debt Information
Your qualification to receive a mortgage loan comes down, in part, to your debt-to-income ratio. Your pay stubs and tax documents show your income. Next you’ll need to show any outstanding loans you have, including car payments, student loans, additional mortgages or credit card debt. Gather up-to-date statements that show your remaining balances. Go a step further and compile creditor names and addresses, account numbers, monthly payment amounts and outstanding balances of each account.
8. Confirmation of Property
If you own another property or have owned one in the past, be ready to provide proof of ownership or sale.
9. Residential History
Create a list of your home addresses for the last two years, along with landlords’ names and contact information, if applicable.
10. Proof of Additional Income
If you receive Social Security or disability payments, pension income, dividends or bonuses, you’ll need to show it. Potential homebuyers aren’t required to disclose child support and alimony payments; discuss whether it’s appropriate with your loan officer.
11. Stocks, Bonds and Savings Statements
Your total assets will count toward your ability to purchase a home. Provide statements showing the value of your CDs, IRAs, stocks, bonds or other securities, including any money you’ll use toward a down payment.
12. Earnest Money Source
After you make an offer on a property and provide earnest money — a deposit held in escrow that shows your commitment to purchase — you’ll need to prove the source of that money. If it came from your savings account, a PDF of your bank account history will do the trick. If you received the money as a gift from a family member or another way, you may need to provide a letter confirming the source.
Protect Your Investment
Paperwork is a big part of the homebuying process, and so is ensuring your new home is protected. Connect with a Farm Bureau agent to learn more about protecting your new home with homeowners insurance.